Opinion of the European Economic and Social Committee on individual and collective energy self-consumption as a factor in the fight for the green and energy transition, and for economic and social balance (own-initiative opinion)
Date: 2023-10-25
Institutions: European Economic and Social Committee
Subjects: energy consumption, energy cooperation, energy efficiency, energy poverty, energy production, energy storage, energy transition, price of energy, prosumer, renewable energy








C_202400873EN.000101.fmx.xml












Official Journal of the European Union


EN
Series C













C/2024/873


6.2.2024






Opinion of the European Economic and Social Committee on individual and collective energy self-consumption as a factor in the fight for the green and energy transition, and for economic and social balance
(own-initiative opinion)
(C/2024/873)







Rapporteur:



Pierre Jean COULON











Legal basis


Rule 52(2) of the Rules of Procedure
Own-initiative opinion




Plenary Assembly decision


25.1.2023




Section responsible


Transport, Energy, Infrastructure and the Information Society




Adopted in section


6.10.2023




Adopted at plenary


25.10.2023




Plenary session No


582




Outcome of vote
(for/against/abstentions)


156/0/2




1.   Conclusions and recommendations









1.1.


A genuinely people-centred debate on self-consumption and self-generation of energy is imperative if we really want these trends to be a lever for promoting the green and energy transitions and economic and social balance.












1.2.


The European Economic and Social Committee (EESC) considers that local and regional authorities need to favour ‘extended collective’ self-consumption projects. The societal dimension of self-generation and the fight against energy poverty are after all part of the equation. Allowing greater flexibility for local and regional authorities to use surplus could mitigate the risk of a social divide caused by the emergence of ‘private energy preserves’ for consumers who are sufficiently well-off to invest in means of production and ultimately pay less for their energy.












1.3.


Not everyone can produce renewable energy at home, often because they do not own their homes or do not have the financial means to do so. The EESC therefore believes that it would be useful to make it possible for everyone to use electricity produced outside the immediate vicinity of the individual or collective self-generation installation. It would also be sensible to make it easier for the most vulnerable part of the population, including those living in energy poverty, to generate and use their own energy.












1.4.


Taking an educational approach and providing clarity on the way the data collected are used, further consideration should be given to promoting the widespread use of smart meters compatible throughout the EU and the pooling of generation and storage equipment as ways to standardise self-generation and make it affordable. In this vein, the grid also needs to be modernised.












1.5.


Good practices, such as not-for-profit initiatives for collective purchase of renewable energy installations, are being developed, resulting in increasing acceptance of these new modes of energy production and consumption. The EESC calls on the European Commission to continue to support these initiatives.












1.6.


The EESC plans to update this opinion and issue fresh conclusions and recommendations in the light of the Commission studies on this subject and the study on energy poverty, which are to be published at the end of 2023.




2.   General comments









2.1.


The topic of sharing self-generation and self-consumption of energy, also known as prosuming, is not as new as media coverage suggests and people’s appetite for residential photovoltaic equipment, in particular, has plenty of room to grow in terms of the installed capacity of all photovoltaic equipment connected to the grid. This is the first paradox of this topic.












2.2.


The technical terms mask a very simple reality: producing electricity to meet own consumption needs. This is not a new idea. In France, for example, as early as 1882, a hydroelectric power plant was built in the Grésivaudan Valley by the industrialist Aristide Bergès to meet the needs of a paper mill. It then supplied the tram from Grenoble to Chapareillan because the electricity network did not cover the whole territory.












2.3.


A century later, and even before any regulation on the possibility of connecting photovoltaic panels to the grid, a few pioneers set up a solar energy skills centre, under the name Phébus, which in 1992 installed Phébus-1 — the first photovoltaic panel connected to the grid.












2.4.


These days, the development of self-consumption is perceived as supporting the energy transition and as a vehicle for rolling out the energy transition at local level and as close to individuals as possible. This is governed by a fairly simple equation: if the conditions for developing it are in place, self-consumption is likely to have a strong cultural effect by increasing people’s involvement in the energy transition, given that climate degradation is mainly due to the use of fossil fuels that are still needed today to meet our societies’ overconsumption.












2.5.


Self-consumption is also perceived to foster ownership and better control of consumption habits, as it encourages energy saving and efficiency. The use of digital meters for digital devices also increases this awareness, as it calls on people to reconsider their consumption habits throughout the day. The EESC would also point out that smart meters and aggregators are useful for fully harnessing the potential of flexibility. Many countries are lagging behind when it comes to rolling out smart meters. What is more, previous-generation smart meters are not two-way and do not allow electricity generated by the household’s solar panels to be injected into the grid.












2.6.


It also encourages the development of citizen energy communities as referred to in Article 16 of Directive (EU) 2019/944 of the European Parliament and of the Council (1) on recast of common rules for the internal market for electricity.












2.7.


There are several individual and collective self-consumption models:






—


self-generation with full injection: the entire production is injected into the grid and consumption is fully taken from the grid;










—


self-consumption with injection of surplus: only surplus production is injected into the grid; consumption comes first from production and then from the grid if production is insufficient;










—


total self-consumption: production is never injected into the grid — remains at local level. Production is managed — consumed, stored or lost — locally.
















2.8.


The self-consumption with injection of surplus mode seems preferable since it provides the possibility of a short production-consumption circuit (which is not the case in the full injection mode) without loss of energy (which is not the case for total self-consumption). However, these theoretical and simplified models face a major challenge because the consumption and production curves do not correspond in all cases.












2.9.


These challenges can be quantified using three indicators, but the equation is complex because it is necessary to reconstruct the consumption curve and estimate the production curve and seasonal deviation, i.e.:






—


the self-consumption rate — the ratio between self-generated consumption and total production;










—


the production rate — the ratio between self-generated consumption and total consumption;










—


the coverage rate — the ratio between total production and total consumption.
















2.10.


There are three main types of solution:






—


on the one hand, adapting consumption by moving from off-peak to peak production periods, for example by setting high-consuming domestic applications such as energy-intensive domestic appliances to run during peak periods, using automated home systems to activate or deactivate them;










—


on the other hand, storing part of the non-consumed surplus produced energy for use at a time of lower production. However, this solution is hindered by the current state of technology: storing one kWh of solar energy doubles, or even triples, the cost, not to mention the environmental cost of the dominant lithium-ion battery technology;










—


there is another possibility that the EU should promote: making it possible to use electricity produced outside the immediate vicinity of the individual or collective self-generation installation.
















2.11.


The EESC notes that individual self-consumption is not limited to the residential sector, with its limited capacities. It also applies in the commercial sphere, with larger capacities produced by parking shelters, roofs of large commercial or industrial sites, SMEs, etc., roofs of municipal buildings or companies, cogeneration or bioenergy installations at industrial and commercial sites, etc.












2.12.


Self-consumption can also be collective, for example in a block of flats. In this case, self-consumed energy is accounted for per flat following the distribution key principle. It could also be ‘extended collective’ to bring together producers and consumers located in one geographical area and include consumers that could range from individual or collective residential to the third sector or even industry. The variable distribution key may seem preferable as it allows production to be allocated pro rata to consumption according to time slots, but it is not without drawbacks since consumers could be tempted to increase their consumption in order to increase their share of self-consumption.












2.13.


This can be dealt with by designating a coordinating legal person to decide on the distribution key and communicate it to the grid manager.




3.   Specific comments









3.1.


The EESC notes that self-consumption, which appears simple at first glance, is actually more complicated than it seems because it brings two issues — production and consumption of energy, which are initially separate — together around one legal entity, be it a natural or legal person. It is therefore not surprising that regulation of this rather recent phenomenon has not yet been fixed. Reconciling the definition of a specific grid use tariff, compliance with the requirements of the distribution grid and the position of third-party investment is complicated. This complexity is undoubtedly linked to the costs of the electricity grid: the increasing share of volatile renewables is driving up the grid’s systemic costs. The EESC emphasises that existing tariff patterns (peak/off-peak) do not relate to the precise peaks in renewable energy generation or to the carbon footprint.












3.2.


The disruption of the energy landscape, caused in part by self-consumption, can be outlined as a five-step pyramid:






—


individual self-consumption;










—


collective self-consumption;










—


extended collective self-consumption;










—


renewable energy communities, a concept introduced by Directive (EU) 2018/2001 of the European Parliament and of the Council (2), which aim to provide environmental, economic or social benefits to their members or territory. These are legal entities controlled by individuals, SMEs or local authorities that can produce, consume, store, share or sell the renewable energy produced. They have access to the energy market, directly or through an aggregator;










—


citizen energy communities defined by Directive (EU) 2019/944, which go beyond the renewable energy community in that they can ‘engage in generation, including from renewable sources, distribution, supply, consumption, aggregation, energy storage, energy efficiency services or charging services for electric vehicles or provide other energy services to […] members or shareholders’.
















3.3.


These directives demonstrate a desire to transform the European energy landscape and go beyond self-consumption, as they set out new organisational models for local actors to coordinate, which cannot be confused with self-consumption. They are the last steps in the pyramid to ensure that the promises of the societal disruption of the energy transition implemented locally, as close as possible to individuals, and the involvement of people in the energy transition, are kept, while encouraging energy saving and efficiency. Good practices, such as not-for-profit initiatives for collective purchase of renewable energy installations, are being developed, resulting in increasing acceptance of these new modes of energy production and consumption. The EESC calls on the European Commission to continue to support these initiatives (3).












3.4.


According to the EESC, self-consumption is also hampered by other factors. For example, the photovoltaic sector is subject to several contingencies: geographical setting affects the number of hours of sunlight from region to region and the capacity and type of installations and their orientation therefore need to be adapted (roof, shade, ground), which affects the lifetime of the panels. Due to technical, financial and regulatory constraints, not all users can install panels. Only property owners who have the wherewithal and whose property is compatible can install photovoltaic panels, which excludes many of those who rent accommodation or do not have the financial capacity to join a collective self-generation project. Moreover, some town planning rules ban the installation of panels on listed sites (such as those in historic town and city centres, heritage sites and sites listed in the environmental code) (4).












3.5.


Installing and maintaining the panels can rapidly become cost-prohibitive when the price of bringing the property’s electrics up to code and skilled labour is added in.












3.6.


The environmental cost of chemical storage of batteries also tarnishes the image of self-consumption. Indeed, the current dominant technology today is lithium-ion, but the process of extracting lithium requires a very large amount of water (approximately two billion litres per tonne of lithium) and most of the world’s supply comes from an arid area known as the Lithium Triangle shared between Bolivia, Chile and Argentina. Extraction also results in toxic discharge, as demonstrated by the scandals around the Ganzizhou Rongda mine in Tibet, which ravaged the local ecosystem to such an extent that the authorities were forced to close the plant in 2013 (before allowing it to reopen in April 2016) (5).












3.7.


Moreover, storage is very expensive: EUR 50-80 billion for a single TWh stored for a season or less than a year to meet smoothing needs, not forgetting that batteries should be changed every 15 or at least every 20 years. However, several manufacturers, such as Tesla and the Chinese company CATL, are announcing that they will soon produce batteries that last two to four times longer, while alternatives to lithium-ion such as sodium-ion (Na-ion) are emerging (6).












3.8.


The EESC notes that abuse and fraud committed by ‘ecocriminals’ also prevent self-consumption from developing smoothly. These are sales representatives and independent actors who take advantage of people’s enthusiasm for energy self-consumption, and solar energy in general, to mislead people with inaccurate sales pitches, promises of huge savings, state aid that does not exist and disguised consumer credits. Professionals in this sector have reacted by creating guides to fight scams, but the trust of the energy self-consumer is still not guaranteed (7).












3.9.


Digital tools for sharing data which monitor consumption pose problems in terms of data protection and processing and the security of the servers storing those data. Will the ‘energy ombudsman’ provided for in Directive (EU) 2019/944, currently being reviewed (8), be sufficient or even competent in the event of a dispute between private individuals? This would mean extending the remit of the ombudsmen (9).












3.10.


The slow development of self-consumption is profoundly disrupting certain highly centralised production models, particularly nuclear plants, through the emergence of short, economical energy production/consumption circuits. Some of the fundamental elements of electricity transmission are therefore called into question by self-consumption:






—


the ‘postage stamp’ tariff principle, according to which transmission of energy does not depend on the distance between production and consumption, is disrupted by self-consumption because the short circuit has specific tariffs for collective self-consumption;










—


the development of self-consumption may also lead to a loss of revenue for a distributor faced with significant investment needs as the grid is so busy at peak times.
















3.11.


However, the benefits of the energy transition vary significantly between individual and collective self-consumption. Individual self-consumption contributes to the development of renewable energies and can encourage an individual or company to become more efficient and save energy. Installing an individual self-consumption facility is still an isolated act that may be purely financially motivated.












3.12.


Collective self-consumption has more of a societal dimension in that it can create solidarity between people and/or businesses in regions by putting in place short electricity production and consumption circuits. It is an initial stage of implementing the energy transition on a local scale, pending the emergence of renewable energy communities and citizen energy communities.












3.13.


Local and regional authorities and civil society will therefore be at the forefront in implementing the energy transition and will have a key role to play in fostering the development of extended collective self-consumption projects.
However, it is also necessary to strengthen and stabilise the regulatory framework and provide financial incentives such as investment premiums for individual self-consumption, guarantee tax exemption and contribute to network costs for the energy consumed, not penalise low self-generation rates, build confidence in the photovoltaic and wind power sectors by combating ecocriminals, allow the re-sale of the surplus on the electricity market, and allow links between individual and collective self-consumption in cases of limited use.












3.14.


Encouraging municipalities to favour extended collective self-consumption projects is also part of the equation, along with allowing more flexibility for regional authorities to use the surplus, particularly with a view to combating energy poverty and reducing the social divide caused by the emergence of ‘private energy preserves’ for consumers who are sufficiently well-off to invest in means of production and ultimately pay less for their energy.
The EESC points out that in a recent survey the majority (57 %) of energy communities identified energy poverty as a significant or very significant problem, but relatively few are taking significant action to tackle it (10). Vulnerable households do not feel that they are properly aware of or informed about the technical and financial support available to them. What is more, some households do not have the wherewithal to opt into energy communities or can be reluctant to ask for help, either because they are worried about being stigmatised or, sometimes, because they do not trust these communities. This occurs when electricity suppliers are themselves part of energy communities. Specific programmes and targets for vulnerable and energy poor households are therefore needed.






Brussels, 25 October 2023.


The President of the European Economic and Social Committee

Oliver RÖPKE
            





(1)  Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU (OJ L 158, 14.6.2019, p. 125).

(2)  Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82).

(3)  Funded by Horizon 2020 CLEAR 2.0 and Horizon 2020 CLEAR-X (https://www.clear-x.eu/).

(4)  https://www.culture.gouv.fr/en/Thematic/Monuments-Sites/Historical-monuments-heritage-sites/Environmental-themes/Installation-of-photovoltaic-panels-in-the-vicinity-of-historic-monuments-and-in-notable-heritage-sites

(5)  Friends of the Earth Report — Lithium: the need and urgency to introduce new collection and recycling processes, September 2013.

(6)  https://www.iea.org/reports/global-ev-outlook-2023/trends-in-batteries

(7)  https://conseils-thermiques.org/contenu/arnaque-panneau-solaire.php;
https://www.otovo.fr/blog/stop-arnaques/arnaques-aux-panneaux-solaires-web

(8)  COM(2023) 148 final of 14 March 2023.

(9)  https://www.beuc.eu/sites/default/files/publications/BEUC-X-2023-047_Consumers_should_always_have_access_to_ADR_in_energy.pdf

(10)  https://www.energysolidarity.eu/cees-survey-energy-poverty-action/


ELI: http://data.europa.eu/eli/C/2024/873/oj
ISSN 1977-091X (electronic edition)